This invention relates to automated contracting systems, and more particularly to systems and methods for permitting the use of complex pricing scenarios in computer-controlled bidding systems and processes wherein bidders may enter their prices directly into the buying system.
Businesses are not in business to make agreements. Rather, they are in business to make products, provide advice and services, and help people. Agreements, typically in the form of contracts, are simply a necessary part of doing business. But agreements generally cost money, time, and other resources because they require negotiation, revision, formalizing, and execution. All of these costs interfere with the ability to conduct business efficiently.
Traditional contracts are also relatively inflexible means by which to reach an agreement. Generally a contract covers a defined time period, such as a year, and thus must be drafted generally enough to cover unforeseen circumstances that might occur during the contract period. Flexibility in a contract generally requires generality in its terms, which tends to make the contract vague. In addition, buyers spend an inordinate amount of time on the agreement process.
Also, while it is possible in a contract that is negotiated face-to-face over a long period to have complex pricing schemes, such contracts are expensive to negotiate and thus are only appropriate for contracts that cover very large projects. On the other end, certain contracts can be assembled very easily. The most common example is the adhesion contract, whereby one party picks the terms, and provides them to the other party on a take-it-or-leave-it basis. For example, the terms may be listed on the back of an order form or an invoice. Such a system is simple and easy to administer. There is no negotiating and essentially no flexibility. Adhesion contracts are typically used in retail establishments and for some automated transactions, for example, with “click wrap” agreements. Because there is no negotiating, the subtleties of human behavior play little or no role, and such transactions can be automated very easily.
Other automated contracting schemes provide more flexibility, such as by opening a bidding situation in which various bidders can provide an offered price or other terms, and the buyer can select one of the bidders. This approach, although more flexible than an adhesion contract, still lacks for flexibility offered to the contracting parties.
Thus, there is a need for a system and method that provides for automated control of bidding and permits the buyer to receive flexible and complex pricing schemes from the bidders.